Get With the (Loyalty) Program!!

Loyalty is a funny thing. There was a time, not too long ago, when companies valued it, but they no longer do. That by itself is not really a problem. No, the problem is that they pretend to value it, they make a lot of noise about valuing it, they have all the trappings of valuing it. But they don’t really value it at all.

What they do is they covet it. They actually want your loyalty. They’d do almost anything to have your loyalty. But, it’s clear that they don’t really value it.

You see, if they valued it, then surely they’d reward it. And if they couldn’t or wouldn’t reward it, at least they wouldn’t punish it. But that’s exactly what happens all over the marketplace!!

About a year ago, I opened a new savings account with an Australian Bank – let’s just call it Eastpac. To actually induce me to open the account and put all my savings into it, I was offered an “INTRODUCTORY RATE”. An introductory rate?? Yep, that’s right! As a new customer, I received an extra 2.5% interest for the first four months! “Only for the first four?” I asked incredulously. “Well”, the bank salesman whispered conspiratorially, “if you call us at the end of the four months, we’ll do it again. And, we’ll keep doing it.”

This was a pretty good deal I thought. They say “introductory”, but at least it lasts. You moron, Goldberg. It doesn’t!! After I got out of the hospital and was sufficiently recovered, I called the bank to get my second “extension” of the “introductory” rate, and I was told in no uncertain terms, that that was only for new customers. In fact, a few weeks earlier, my daughter opened an account with them and did get the Introductory rate.

Since then, I’ve noticed this with other banks too. Special introductory rate for new customers. Switch your home loan now and pay no setup fee. Get a new credit card and pay no annual fees and 8 months interest free on all balance transfers!!

That would all be OK I guess. You have to have customer acquisition programs. I can live with that. But where are the customer retention programs? Why don’t I feel the love every time I walk into my local branch (where I’ve been hundreds of times before)? Why do I have to fight over everything when I’m on the phone with them? Why, when they tell me something will happen, can I go to the bank on it not happening (pun well and truly intended)??

The same is true of telephone companies. To get you to switch to them, they will actually pay your exit fees to get you out of your existing mobile phone contract, as well as giving you all kinds of discounts if you’re a new customer. If however, you’ve been with them for, say, 12 years – fuggedaboutit!! You can ask, beg, and threaten – all to no avail. Existing customers are scum of the earth.

In fact, on a day-to-day basis, the most reward for loyalty I get is from my local cafe. Every time I buy a cup of coffee, they stamp my little card, and after the tenth one, I get a freebie!! Now that’s what I call looking after your customers!!!!! Phone companies and banks – take note!!!

I have a theory as to the cause of all of this and I also have an idea about how to combat it. I’ll write about those in the coming weeks.

Meanwhile, what do you think? Do you have any examples of ass backwards “loyalty” from large organizations? How do you deal with it? Leave a comment and let me know!

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I totally agree with you! Banks suck! And they definitely don’t care if you are loyal. They don’t seem to care if you are their customer or not. They know they can always find a new customer (or sucker) who will fall for their marketing scams.

Thanks Moshe, I’m very flattered you remember who I am after all these years!! It has certainly been a long time.
I have been corresponding with Devorah on FB and somehow discovered your blog.
I really hope your health is improving and that you are recovering well…
Yes, I’m well thanks, and now married and have a 5-month-old daughter, named Winter Star.

I have an example. 🙂 Of loyalty done right. With a phone company. Sprint. I’ve been with them for 8 years.. and I always remind them of this! LOL So I have gotten special packages and discounts throughout the years because I tell them if they want to keep me from walking off to take advantage of some enticing offer they need to do something special and they do ! It’s knowing who to speak with .. like the retention department. 😉

This year I switched to a business account. After a lot of moaning that I would lose my seniority.. they got everything switched over. Best move ever, they treat their business customers like gold. Customer service the way it is SUPPOSED to be.. helpful, polite, short hold time. I actually LIKE calling customer service now and feel like I am treated like I’m special. All customers should be treated this way, but “regular” non business customers are not. (And honestly I switched to the business account because the plan rate was better, so I am spending less money but being treated better!)

I also found out that Sprint has a loyalty reward program for everyone who is a customer 10 years or more. A “Gold plan” with lots of perks, faster and more frequent phone upgrades with more discounts and better service.

I was very impressed (as always) with the way you present issues. I remember when you were a teenager, your dream was to write a book. Let’s hope that one day your dream will come true, and you’ll be able to launch a novel. Proud Mum.

To benefit from the banks, you can become a shareholder. That’s who they’re supposed to look after, although the executives seem to benefit more greatly than most. As a shareholder the “loyalty” premium gets paid until you divest yourself of their shares. The banks need the loyalty of customers to do their business, so it may seem like their business ought to be primarily towards customers, but in corporate terms, the customers are there to serve the banks purposes in fulfilling shareholders’ wishes for dividends and capital gains. The challenge for the bank is how to induce customers to fulfil the banks wishes. That’s the business that they seem to take most seriously. This is not a socialist economy where one might expect the greatest good for the greatest number regulated by a benificent government.

Just come across your blog about Loyalty. I recently paid my quarterly fee for a health insurance fund with m’ship since 1978. A few weeks later I received a refund cheque in the mail saying that my policy had been closed.
It appears that I had missed an installment so was about 6 months in arrears. I have had very little claims over the time of my m’ship, so i was really surprised that rather than acceptingmy payment and looking at how to reinstate me, I experienced being dismissed.
The result is there is nothing that will make me return to this very large helath insurance company again as a customer.